Gittell: Economic recovery slower than in past

By Jennifer Keefe

business@seacoastonline.com

January 24, 2013 - 2:00 AM

EXETER — New Hampshire is experiencing a "new normal" in its recovery from the recession.

Dr. Ross Gittell, chancellor of the Community College System of New Hampshire, told members of the Exeter Area Chamber of Commerce on Wednesday that while the Granite State weathered the recession better than the rest of the nation, it's coming out of it more slowly than in past recessions.

"The last three decades, New Hampshire's employment rate and economic growth has exceeded the national average and been stronger than other states in the Northeast," Gittell said at the 2013 Economic Forecast breakfast at the Exeter Inn. "This time that hasn't happened. Something's going on here."

Gittell, who is also forecast manager at the New England Economic Partnership, used data from a recent NEEP economic forecast that projects through 2016. A big reason for the slow recovery in New Hampshire, he said, is a lack of skilled workers.

"Other times, New Hampshire has benefited from a 'just in time' crop of skilled workers from other places," he said. "New Hampshire is not experiencing that net domestic in-migration as it has in the past, and demand is not being met by in-state workers."

The problem is two-fold, as people who typically came to New Hampshire for its quality of life or tax structure may be locked into their home amid a weak housing market and are unable to move.

"Part of the story that may emerge is the housing market will continue to improve and that will provide seeds for stronger economic recovery here," Gittell said.

While New Hampshire's unemployment rate has been significantly lower than the national average, Gittell said it's stagnant at about 5.7 percent. And the state's employment growth has been approximately 2 percent, while coming out of other recessions it's been around 4 percent.

"This is a new normal in New Hampshire," he said. "We're coming closer to the U.S. average."

Gittell said he's not pessimistic about the future, but in order to thrive, the approach to education and learning has to be different than what's being done now.

"The next generation has to have the technological and other skills required by the industries that are growing," he said.

He noted the Boston and Cambridge areas of Massachusetts are "robust economies," which New Hampshire should see as an opportunity, not a problem.

"That's really positive — we can leverage that to New Hampshire," Gittell said. "The mindset has changed in New Hampshire to 'how can we separate ourselves from Massachusetts,' but I think that's the wrong way to think about it. We need to leverage our strengths against Massachusetts."

Better transportation infrastructure and increased broadband access are part of leveraging that strength, he said, as well as building the state's highly skilled work force. Gittell said 40 percent of college graduates don't have the skills employers are looking for, and suggested there is a "disconnect" between school faculty and industry needs.

With just 58 percent of the state's high school graduates going on to post-secondary education (it's about 85 percent in the Exeter area), he said, there should be a greater focus on getting students into community colleges to fill the gap of those who don't go on to a four-year institution.

Community-college enrollment nationwide is about 47 percent, Gittell said, while in New Hampshire it's about half that.

"There's a significant role community colleges can play in filling that gap," he said. "The most important aspect of economic competitiveness is a high-skilled work force. We need to strengthen our connection between post-secondary education and the economy, and we need to do that in all areas of the state."